THE STOCK MARKET

Otago Witness, Issue 3399, 7 May 1919, Page 12

THE STOCK MARKET

UNEXPECTED SLUMP. DUE TO VARIETY OF CAUSES. The unexpected and heavy slump that has occurred in the stock market during the past few weeks (writes the Ashburton correspondent of the Lyttelton Times) has naturally proved most disconcerting to farmers, graziers, and dealers, many of whom are already heavy losers. It is well known, of course, that the slump is general throughout the whole dominion, and the influx of largo mobs of sheep from various parts, north and south, testifies to the fact that the Ashburton County, until quite recently, has been, as it were, a somewhat favoured locality. Anyone who has studied the whole question knows that the primary cause of the big drop in the prices of stock (particularly in store sheep and lambs) _ is the shortage of feed and the partial failure of fodder crops brought about by dry and unseasonable weather; but,_ still there are a variety of other underlying factors that have In a measure contributed to the rapid depreciation in the prices of stock. An analysis of the whole position shows that the turnover from sheep farming during the past three years—which, from a climatic point of view, have been altogether favourable to stock raising—has been unexampled in the history of the dominion, and this fact induced farmers to almost neglect grain gi - owing and to heavily overstock their holdings with sheep, trusting in, a haphazard sort of way to another good season to tide them successfully over what must be classed as a rash and chance speculation. As a. result of keen competition end assured prices for wool and frozen meat, consequent upon the war, those desiring sheep outbid each other, the result being that prices reached an unprecedented level. However, with the advent of a late spring, an unseasonable summer and autumn, together with the reappearance of the pestilential grass grub, practically every farmer in this county (and it would appear right throughout the dominion) found himself much overstocked, so that a laxge proportion of the stock intended for export could not be finished, and the market was glutted, the inevitable result being a sharp depreciation in values.

It has always been considered by prudent farmers and commercial men that the first loss is the best way out of an embarrassing position, and as it would be suicidal to face the winter largely overstocked and little or no prospects for an improved feed supply, the majority of farmers and graziers are wisely sacrificing their surplus stock on a falling market. During, the past few weeks prices for store sheep, including breeding ewes of good types and constjtu tionally sound, have fallen from 7s to 10s per head, ana by the tone at Tuesday's market at the Ashburton yards showed no improvement on that oi the previous six weeks; indeed, if anything, it was worse.

At this> sale a large lino of mixed sheep was offered that originally came from tho south. The line, a dealer's one, had been brought northwards by special train at a cost to tho owner of some £2OO odd. The sheep were then slowly driven from one market to another for a period of five weeks, at an additional expense within the region of £2OO. Forty died on the "trek," and notwithstanding the fact that the owner was offered a fair value several weeks ago, he was compelled on Tuesday to accept prices which will represent a loss to him, including expenses, of between 10s and 14s per head. In conclusion, it may be mentioned that at the present time feed has become so scarce that the best of pastoral country is only able to carry a limited number of stock; and what makes the position much more disconcerting is the ravages of the grass grub in both young and old pastures. Unfortunately for farmers, this pest had made its reappearance in practically every part of the county after an absence of several years. The present big slump in sheep, of course, will not prove a great embarrassment to well-to-do farmers, but to men of small holdings and to those who recently took up land and were obliged to stock theijr holdings from, a high market, tho situation is one that is full of apprehension.